Delinquency Rates for Commercial Properties Increased in Fourth-Quarter 2024

"The delinquency rate for commercial mortgages increased during the final three months of 2024, with increases across most capital sources and property types,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “The challenges facing different sectors vary – with office properties perhaps facing the most challenging combination of weaker fundamentals and stubbornly high interest rates. However, despite the current conditions, other property types continue to benefit from a relatively strong economy.”

• The share of loans that were delinquent increased for some property types, particularly office, lodging, retail, and multifamily. Delinquencies decreased for industrial properties.
• Among capital sources, CMBS loan delinquency rates saw the highest levels but were flat during the quarter.
• 5.3% of CMBS loan balances were 30 days or more delinquent, up from 4.8% at the end of last quarter.
• Non-current rates for other capital sources remained more moderate.
• 1.0% of FHA multifamily and health care loan balances were 30 days or more delinquent, up from 0.87% at the end of last quarter.
• 0.86% of life company loan balances were delinquent, down from 0.94%.
• 0.6% of GSE loan balances were delinquent, up from 0.5% the previous quarter.